It’s the time of year when shareholders get the chance to say how their companies are run.
As the main AGM voting season looms into view, four meetings have been picked out by a governance advisory group as meriting close attention by UK shareholders.
Glass Lewis, which covers more than 30,000 shareholder meetings worldwide, said the AGMs of Rio Tinto (LSE:RIO), Playtech (LSE:PTEC), Boohoo Group (LSE:BOO) and Wizz Air Holdings (LSE:WIZZ) were the ones to watch.
The discontent at Rio is well documented after the mining company blew up a 46,000-year-old Aboriginal heritage site to expand the Pilbara iron ore mine in Western Australia. The resulting anger led to Jean-Sébastien Jacques being replaced as chief executive, while chairman Simon Thompson said this week he would not seek re-election at the 2022 AGM.
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Glass Lewis predicts shareholders may express their dissatisfaction at the company's handling of the situation by opposing the re-election of certain non-executive directors this year. On top of the Glass Lewis advisory, Rio's AGM on 9 April is likely to prove controversial for the £7.2 million in pay recently disclosed in the annual report for the outgoing CEO last year.
No mucking about at Playtech
The focus on the 26 May AGM of Playtech reflects the gambling technology company's previous difficulties in getting approval for its remuneration reports, with 64% of votes being cast against its pay report last year. It was only narrowly approved the previous year.
Glass Lewis said: “No public company in the UK has faced as much shareholder protest against its remuneration practices in recent years as Playtech.”
Playtech has pledged to put a new remuneration policy before shareholders at this year's meeting as it attempts to strike a balance between being a publicly-listed company and the need to retain and incentivise its leadership team. Brian Mattingley, who has extensive experience of the gaming industry after 15 years with 888 Holdings, will be its new chairman from June.
Should Boohoo be scared of shareholders?
Boohoo's meeting will be another one to watch in late May after the recent controversies concerning working conditions within its UK supply chain. The fast-fashion chain said this week that it had appointed Sir Brian Leveson to oversee its Agenda for Change programme and that 64 suppliers had been removed for not meeting the group's standards.
Glass Lewis sees the potential for shareholders to act upon their concerns by voting against the re-election of certain directors.
Wizz Air boardroom pay packets in focus again
The advisory group also notes the outcome of last year's AGM of low-cost airline Wizz Air, after 51.6% of shareholders went against its remuneration report, due in part to concerns about the award of a short-term incentive plan to senior managers. This year's meeting will also need to approve the triennial remuneration policy, which was opposed by 26% in 2018.
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Wizz said in January that the make-up of its remuneration committee was now substantially different and that the feedback of shareholders will be incorporated in its new policy, although it still believes that the short-term incentive plan put before the 2020 meeting was fair.
Among next week's meetings, shareholders will be asked to approve a fundraising by pubs chain Mitchells & Butlers (LSE:MAB) and a change of investment policy at a trust dedicated to renewable energy infrastructure.
JLEN Environmental Assets (Monday, 8th)
FTSE 250-listed investment fund JLEN Environmental Assets (LSE:JLEN) is asking shareholders to support a change in its investment policy so it is able to access a wider pool of environmental infrastructure assets.
These might include battery storage projects, low carbon transport infrastructure, such as electric vehicle charging points, or businesses serving anaerobic digestion plants.
The current portfolio of 34 assets includes the Dungavel wind farm in Lanarkshire, south-west Scotland and the Shoals Hook solar energy plant near the Pembrokeshire Coast National Park.
JLEN, which is advised by Foresight Group, has achieved a total shareholder return of almost 70% between its launch in March 2014 and last September. It joined the FTSE 250 in June and reported a portfolio valuation of just above £550 million in November.
The special meeting of shareholders will also ask for approval to increase the proportion of the net asset value which can be invested in construction projects to 25% from 15%.
This is expected to provide greater flexibility to acquire assets at an earlier stage in their life cycle, boosting its competitive position in terms of acquisition opportunities.
Mitchells & Butlers (Thursday, 11th)
A £351 million fundraising by Mitchells & Butlers, to help the All Bar One and Harvester owner ride out the Covid-19 pandemic, will be the subject of a shareholder vote on Thursday.
The general meeting will take place three hours after the company announces the result of the open offer, which involved seven new shares at a heavily discounted price of 210p for every 18 held. Admission of the 167 million new shares will take place the following day.
Crucially, the investment vehicles of major shareholders, including billionaire currency trader Joe Lewis and the horseracing owners JP McManus and John Magnier, have joined forces to pledge their combined support to the fundraising.
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They have created a new entity called Ozydean to combine their 55% holdings, with
the Takeover Panel declaring that the parties will be able to buy shares without having to make a mandatory offer for the rest of the business.
They will stump up the full amount of £350 million if necessary, ensuring that Mitchells is able to secure a £150 million three-year unsecured revolving credit facility with its lenders.
Chairman Bob Ivell told shareholders recently that their support would put the company in a stronger position once pubs are able to open again.
He added: “Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs.”
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